- With the US imposing sanctions on the Iranian supreme leader, it takes the battle to a different level. With limited options in front of the US, they had no choice but to target individuals in the government for sanctions.
- Metal stocks came under pressure and are likely to feel the pain of a prolonged trade war between the US and China. The G-20 Summit will be a key data point as Trump and Xi are supposed to have serious talks on the trade issue.
- FIIs were net buyers to the tune of Rs.207 crore while DFIs bought Rs.984 crore on Monday. While FII action has been tepid in the last few weeks, domestic institutions continue to be aggressive buyers in the equity markets.
- Markets across the US and Europe were flat to negative on Monday as traders were still gauging the direction of the Iran crisis and the trade war. The focus will be on the G-20 Summit this week and the Middle East situation.
- Downstream oil makes a good short side play with heightened geopolitical risk in the Middle East. We suggest selling into stocks like IOCL, BPCL and HPCL for the short term with 10% downside targets on all the 3 stocks.
- There are a lot of beleaguered stocks like Jet, DHFL, Jain Irrigation and the ADAG group companies that are showing good buying traction. It is best to be cautious on these stocks as most do not have any fundamentals left in them.
- With a large number of defence contracts likely to be farmed out, BHEL may be a good low priced bet at current levels. One can look to buy the stock in the price range of Rs.70-73 with a one quarter target of Rs.95 on the stock.
- The key to this week could be the Middle East situation and how the G-20 Summit works out for Trump and Xi.
